In the fiercely competitive Chinese coffee chain market, Tims China is trying to get out of a breakthrough path.

“Tired and happy or pain and happiness is the norm anyway.” Tims China (hereafter: Tims) CEO Lu Yongchen recently said in a separate conversation with Foodinc that looking back on the past five years, the brand is most proud of becoming a fledgling brand from scratch, but price wars and store opening fever have really put pressure on all brands in the short term. Tims, for example, has closed some underperforming stores this year, and in his words, “these big stores have fulfilled their historical mission.”

But there's give and take. The coffee chain's Q3 2024 report, released today, showed revenue of 359.6 million yuan (RMB) for the quarter; adjusted company earnings before interest, taxes, depreciation and amortization (EBITDA) of 2 million yuan, a positive turnaround for the second consecutive quarter; and a net 49 store additions, a significant rebound from the single-digit growth of the previous two quarters.

While headline brands are still grabbing market share, Tims is now focusing its strategy on profitability and says it wants to grow in a healthier, sustainable way.

“Exhausted and happy or in pain, it's the norm anyway.” When talking to Foodinc, Lu Yongchen is used to these “devilish trips”.

Under the recently unveiled new model of warm food, Tims has set up a new “made-to-order counter” in the store. The entire process of preparing, baking, combining and packing warm food is transparently displayed in front of consumers. At present, Tims “ready-made counter” has been spread to 500 or 600 stores, and will continue to expand in the future.

Lu Yongchen admitted that it is not yet easy to judge when the price war will end. But in some areas and price bands, the price war has eased slightly, some friendly brands have also adjusted the pricing strategy.

“We still need to look at the nature of the inner roll, when you and others are the same product, the same set of systems, you have to roll, to fight for survival, but this is a growth without development. This is why we have been emphasizing the differentiation route of 'coffee + warm food.'"” Lu Yongchen said.

Today, Tims' store opening focus will slowly tilt towards smaller stores. “China now has a high percentage of coffee takeout and carryout, and it's not the big stores that can meet customer demand. In terms of return on investment, the smaller store type is now a better choice.” Lu Yongchen said.

Whether it's the “coffee + bagel” warm food package or the small store type, this is actually the localization of Tims. “Foreign Tims are large stores, we are also combined with the current situation of the Chinese market, customer demand, the competition for a comprehensive review of the business model, innovation more suitable for local development of the store type.” Lu Yongchen said.